Hungary Hit By Worst Social Unrest Since Elections (Worthy News In-Depth)
By Stefan J. Bos, Chief International Correspondent Worthy News reporting from Budapest
BUDAPEST (Worthy News) – Tense protests continued in Hungary’s capital till the early hours of Thursday after the government announced “an energy emergency” and effectively raised taxes for hundreds of thousands of small entrepreneurs as the nation’s currency plunged to record lows while inflation reached the highest levels in decades.
The Budapest demonstrations, entering their third day Thursday, mark the first social unrest since Hungary’s nationalist Prime Minister Viktor Orbán, 58, was elected for a fourth consecutive term in April. He came to power in an election that international observers said was “marred by the pervasive overlapping of government and ruling coalition’s messaging that blurred the line between state and party, as well as by media bias and opaque campaign funding.”
Orbán, facing criticism for his perceived authoritarian style, was not present when Parliament hastily voted this week to end the simplified tax regime, known as KATA, for most entrepreneurs, impacting at least 400,000 people and their families. Small businesses have been the backbone of Hungary’s aging population of nearly 10 million people.
The opposition, which voted against the move, noted that Orbán had vetoed the global corporate tax proposed by U.S. President Joe Biden in the European Union, citing Hungary’s competitive advantage as the nation with the lowest such tax in the bloc.
Instead of slightly raising taxes for international corporations, the government now targets hard-working Hungarians, several opposition parties said in statements. “This government does not consider the interests of the Hungarian people to be the most important, but the interests of large foreign companies,” argued Hungary’s Green Party (LMP).
Trying to take away attention from the social unrest, the government returned to its proven playbook, warning Wednesday of a rise in “illegal migrants.” Orbán’s administration said it would send additional “border hunters” to Hungary’s frontier with Serbia after recent clashes between refugees killed one and injured several more, including a 16-year-old-girl. Hungary’s Defense Minister Kristóf Szalay-Bobrovniczky added there would be more military operations to “protect Hungary and Hungarian families.”
MANY UKRAINIANS
While Hungary said it allowed in more than 830,000 Ukrainian refugees, it pushed back over 110,000 “illegal migrants” trying to enter from Serbia this year. Demonstrators suggested government tactics to confuse current legal issues with migrants would not work amid mounting public outcry over the social consequences of tax policies.
Critics say, Orbán, the darling of some conservatives in the United States and former U.S. President Donald J. Trump, needs to finance the budget after the European Union withdrew billions in aid over rule-of-law concerns, including corruption.
The government claims the legislation is necessary as many entrepreneurs abused the current flat-tax rate system. But those rallying in Budapest fear many people will soon be out of a job in a nation where entrepreneurs still face the impact of the previous government-imposed
coronavirus pandemic restrictions and the Russian invasion of neighboring Ukraine.
Crowds were seen near Parliament, and many also blocked bridges as well as other areas in Budapest, despite some being detained by police. Others marched towards the ruling Fidesz party headquarters. Many protesters also walked towards the hilly Buda Castle District, trying to reach the prime minister’s office, but were blocked by security forces.
Protester Tibor Tarcsay, 33, fears his future as a freelance translator is threatened by the law, saying he doesn’t know how to survive once it takes effect in September. “I might move abroad,” he said, speaking about a broader trend among younger Hungarians. Within two months, “crowds of people are going to be standing in line at charity organizations to get a can of lentils,” he added.
Embattled Orbán’s chief of staff, Gergely Gulyás, told reporters he hadn’t noticed the protests “as they were competing with the regular traffic jams in Budapest.” He defended the government’s KATA policies and its decision to introduce an export ban on fuels like natural gas and the scrapping of years-long caps on utility prices for higher-usage households. “The time has come for the government
to declare a state of emergency in energy,” he explained after Orbán’s cabinet discussed supply problems in Europe, including in Hungary.
FUEL COSTS
Natural gas supplies to Europe have tightened, and fuel costs have soared since Russia invaded Ukraine in February. Hungary, which is heavily dependent on Russian natural gas for about 85 percent of its needs, plans to negotiate new deals, Foreign Minister Péter Szijjártó said in Budapest after talks with his Austrian, Slovenian, Slovak, and Czech counterparts.
However, Orbán has been condemned by several leaders in the region for his perceived cozy relationship with Russian President Vladimir Putin. The prime minister says the ties are necessary to ensure energy supplies, which also includes Russian involvement in upgrading Hungary’s only nuclear power plant.
Orbán passed a controversial decree last month enabling his government to supervise vital energy firms and a gas pipeline network in an emergency to ensure a continuous supply. As a result, economists said Hungary is at risk of a potential energy shortage, which could put additional pressure on the forint, the region’s worst-performing currency.
Yet to please its voters, the government still wants to keep a price cap on prices for petrol and diesel of 480 forints ($1,17) per liter (0.264 gallons) for Hungarian drivers up to 50 liters per day, while most other EU citizens pay about twice as much.
Szijjártó said Hungary’s natural gas storage facilities were 44 percent full, representing about a quarter of annual consumption. Still, data from Hungarian regulator MEKH suggested it may be less than half of that.
Gulyás stressed “that for the time being,” Hungary’s gas supply was uninterrupted.
Yet, he warned that any future restrictions, should they be needed, may affect households. “Wastefulness can no longer be afforded anywhere. So every alternative should be looked at that provides incentives for the most sparing use of energy in the economy.”
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